Question

Express Auto, an automobile mega- dealership with more than 600 employees that represents 22 brands has received a very discouraging set of survey results. Customer satisfaction scores have fallen for the ninth straight quarter. Customer complaints include:

• It was hard to get prompt feedback from mechanics by phone.
• Salespeople often did not return phone calls.
• The finance people seemed “pushy”.
• New cars were often not properly cleaned or had minor items that needed immediate repair or adjustment.
• Cars often had to be returned to have repair work redone.

The table given below describes Express Auto’s current compensation system.

Express Auto Team	Responsibility of Team	Current Compensation Method
1.Sales force	Persuade buyer to purchase a car.	Very small salary (minimum wage) with commissions. Commission rate increases with every 20 cars sold per month
2. Finance office	Help close the sale; persuade customer to use company finance plan.	Salary, plus bonus for each $10,000 financed with the company.
3. Detailing	Inspect cars delivered from factory, clean and make minor adjustments.	Piecework paid on the number of cars detailed per day.
4. Mechanics	Provide factory warranty service, maintained and repair.	Small hourly wage, plus bonus based on (1 )number of cars completed per day and (2) finishing each car faster than the standard estimated time o repair.
5. Receptionist/ phone service personnel.	Primary liaison between customer and sales force, finances and mechanics.	Minimum wage.

What recommendations would you make to improve the compensation system in a way that would likely improve customer satisfaction?

Answer 1

Express Auto Team	Responsibility of Team	Current Compensation Method	modified compensation method
1.Sales force	Persuade buyer to purchase a car.	Very small salary (minimum wage) with commissions.	Base Salary increase by 15%
Commission rate increases with every 20 cars sold per month	Commission Rate increases with every 10 cars sold per month
2. Finance office	Help close the sale; persuade customer to use company finance plan.	Salary, plus bonus for each $10,000 financed with the company.	Salary, plus bonus for each $10,000 financed with the company.
3. Detailing	Inspect cars delivered from factory, clean and make minor adjustments.	Piecework paid on the number of cars detailed per day.	Piecework paid on the number of cars detailed per day.
4. Mechanics	Provide factory warranty service, maintained and repair.	Small hourly wage, plus bonus based on (1 )number of cars completed per day and (2) finishing each car faster than the standard estimated time o repair.	Small hourly wage, plus bonus based on (1 )number of cars completed per day and (2) finishing each car faster than the standard estimated time o repair.
5. Receptionist/ phone service personnel.	Primary liaison between customer and sales force, finances and mechanics.	Minimum wage.	minimum wage